The Dow last traded at 16,667 right about where it was a week ago. The S&P 500 is trading at 1,917. Gold is trading at $1,245 an ounce, while oil futures at $102.64 a barrel. Gas prices, (Regular in El Dorado Hills, Costco, AM/PM), are at $3.89/Gal.

Mortgage Backed Securities or “MBS” yields are interest rates at which banks sell their loans into Fannie Mae and Freddie Mac bond programs. The FNMA 30-year fixed 4.0% coupon, containing 4.25% – 4.625% mortgages, pretty much the benchmark or how rate sheets are priced these days is currently trading at 105.80 about .30 better than where we were last week. We’ve broken out of the past trading range and rates are still trending lower at this point. Basically each percent change in the price of the security translates to the price (or points paid or credited) of the mortgage rate. The higher the number (price), the better the rate.

In economic news this week; “Economics: The science of explaining tomorrow why the predictions you made yesterday didn’t come true today.” The reader’s digest version is the economy is plugging along, the economy contracted in the first quarter for the first time in three years, Consumer confidence is a bit higher, home prices are higher,

Millennials are going to make major shifts in corporations over the next decade and most people aren’t ready for the amount of change that’s coming. By 2025, Millennials will account for 75% of the global workforce and by next year, they will account for 36% of the American workforce. At some companies like Accenture and Ernst & Young, they already account for over two thirds of the entire employee base. The Millennials like the Baby Boomers are very likely to shape many things to come just as their parents did. To be continued…

The largest Navy ship-building contract ever boosted orders for durable goods in April, but demand for long-lasting civilian items such as personal computers and appliances slowed a bit after surging in the prior month. Orders for long-lasting goods rose 0.8% in April, propelled by the biggest burst of orders for defense equipment since December 2012. The Navy placed a $17.6 billion order in late April for 10 nuclear-powered submarines. Are the ones we have wearing out or are we planning an invasion somewhere? The durables report is often quite volatile and subject to large revisions. Business investment has repeatedly faltered since the recovery began in mid-2009 and the question in whether companies are ready to sustain a faster pace of spending after years of frugality.

The economy contracted in the first quarter for the first time in three years, hampered by harsh weather that disrupted business and slowed construction. Yet the damage seems to be fading fast amid widespread signs that growth has accelerated in the spring. Gross domestic product, or GDP, the sum of all goods and services produced by the economy, shrank by annual pace of 1% in the first three months of 2014, the Commerce Department said. Initially the government had reported last month that GDP rose at 0.1% rate. GDP is anticipated to snap back with a 3.8% gain.

The Conference Board said its consumer confidence index in May rose to 83 from 81.7 in April. Both the present situation and future expectations indices also advanced. While there is a real pickup in consumer confidence, six years out from “the Great Recession,” sentiment is still at very weak levels. Those who plan to buy a home within six months fell to 4.9% in May, the lowest since July 2012; that compares with a percentage of 5.6% in April and as high as 7.4% in December.

Consumer spending slipped 0.1% in April, the first decline in a year, as we cut back on car purchases and spent less on utilities such as natural gas and electricity as the weather warmed up.Just one month earlier, consumer spending jumped by a revised 1%, reflecting the largest increase since 2009. A large chunk of the increase in spending in March, and most of the decline in April, was tied to changes in what we paid for utilities. We spent less to heat and power our homes in April than we did in March.

Personal incomes, meanwhile, rose 0.3% in April. Adjusted for inflation, disposable income rose 0.2% last month. Disposable income is mainly the money left over after taxes and an increase typically foreshadows an rise in consumer spending. Yet over the past 12 months disposable income has risen just 2%, a rate that needs to rise if the economy is going to grow much faster.

On the Real Estate front: Home prices rose 0.9% in March, the first increase in five months, but annual growth is slowing down a bit. Including March’s gain, prices across the 20 cities were still about 19% below a 2006 peak. Year-over-year home prices were up 12.4% in March. Going forward home prices are expected to continue to slow down as inventories expand. Both the number of new single-family homeson the market, as well as existing homesavailable for sale, rose in April, according to reports released last week. Here locally inEl Dorado Hills, Cameron Park and Shingle Springs as far as new listings go this month May 1 through 29 we had 139 new listings. Current inventory is 336 homes listed for sale (per MLS). Last year in the same time period there were 201.

The National Association of Realtors reported that pending home sales rose 0.4% in April, the second consecutive gain after slumping since the summer, signaling that sales of existing homes may pick up. The index of pending home sales hit 97.8 in April compared with 97.4 in March. Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective home buyers’ confidence. Despite April’s gain, the gauge was down 9.2% from a year earlier, hit by few homes available for sale and pricier properties. An index reading of 100 equals 2001’s average contract activity level. Here locally pending sale increased 9.8% from March to April.

On the Employment front:The number of people applying for unemployment benefits sank last week to the second-lowest level since the recession ended in mid-2009, suggesting continued improvement in a labor market that’s perked up in the early spring. Initial jobless claims fell by 27,000 to 300,000 in the week ended May 24, the Labor Department saidThursday.